Proview Rejects Apple’s $16M iPad Settlement Offer

Apple offered Chinese company Proview 100 million yuan (US$16 million) to settle the two companies’ legal dispute over the rights to the “IPAD” trademark in China, according to the Bejing Times (translation viaThe Next Web). The claimed offer amount was rejected by Proview earlier this week.

Struggling Proview, once a successful manufacturer of computer displays and electronic accessories, has fallen into significant debt and, it is perceived by most observers, is fighting Apple over the iPad trademark in order to receive enough money to pay off its creditors.

The Beijing Times reports that sources familiar with the negotiations claim that the Chinese firm needs at least 400 million yuan (US$63 million) to cover its liabilities and has thus supposedly countered Apple’s offer with that amount.

Proview’s counter offer of $63 million shows that the two companies may finally be close to reaching a settlement on the more than year-long dispute. Proview’s initial demand was over $2 billion but the company is under pressure from creditors to obtain cash quickly.

Apple is also anxious to resolve the dispute. The company’s latest iPad, although approved by the Chinese government for sale, has yet to launch in the country, with most analysts predicting that Apple does not want to risk a product launch until the trademark rights have been settled.

Proview’s financial mis-management is not Apple’s fault. I doubt that they would have asked for $63M back when the trademark was originally sold through their Taiwan subsidiary for $55K or whatever the amount was, even if they had known that it was Apple doing the purchase through a shell company (which is perfectly legal, BTW. Disney did exactly the same thing when they bought the land for Disney World, in order to avoid people artificially jacking up the price of what was essentially useless swamp land just because it was Disney doing the purchase).

However, Chinese protectionism probably won’t allow any other outcome than Proview being pulled out of debt by Apple, even though that would be an unfair result.

If they countered with $63 million, it’s over. Done deal. Apple will still go through the motions, drag things out, maybe trim a few million off; they don’t want to become an easy mark. But the check is as good as cut, IMO.